We talk a lot about Visa and Mastercard, and for good reason. After all, the two payment networks process over 75% of all global transactions between them — 50% to Visa alone. American Express makes up about 3% of total transactions, but when we look at purchase volume, AMEX is almost tied with Mastercard at 20% of the total money spent through credit cards.

Though it’s used far less than Visa or Mastercard, the AMEX card is typically used for bigger purchases. And where big purchases are made, fraud and chargebacks are sure to follow. If you accept AMEX, or you’re thinking about it, it’s important to understand how they handle chargebacks. The differences can be profound for some merchants.

How American Express Chargebacks Work

AMEX chargeback process

The most important distinction is that AMEX is its own issuer. In some respects, that simplifies the process. The cardholder has 120 days to dispute a transaction, and they can only dispute a charge no more than twice. As both the payment network and the issuer, AMEX has more information on a disputed transaction.

However, unlike Visa and Mastercard, they’re the issuer and tend to favor the cardholder in disputes. Case in point: how they handle disputes. AMEX responds to disputes in one of three ways:

  1. They may dismiss the dispute as invalid and sustain the charge.
  2. They may issue an immediate chargeback.
  3. They may send an inquiry to the merchant for additional information

The most common verdict is the immediate chargeback, which is the most problematic for merchants. Merchants in turn may respond in one of the following ways:

  1. Accept the chargeback.
  2. Issue an immediate refund or proof that they refunded the cardholder.
  3. Submit evidence proving that the charge is valid (representment).
  4. Send no response (chargeback stands).

In the case where AMEX requests additional information, merchants have 20 days to respond. They get one shot to reply and deflect the dispute. There is no representment process for the merchant to fall back on once the chargeback goes through.

The AMEX Chargeback Mitigation Program

AMEX is not as up-front about its thresholds for its chargeback monitoring programs. High-risk merchants are often placed into monitoring in order to be able to begin processing AMEX. Once placed into the monitoring program, AMEX will cease sending merchant inquiries and issue immediate chargebacks on all disputes.

If you are a high-risk merchant, AMEX may not be a good fit for this reason. Visa and Mastercard have a more balanced position; they don’t decide which disputes become chargebacks and they tend to make policies that consider the merchant as well as the cardholder. Because AMEX is its own issuer, they have a vested interest in favoring the cardholder because that’s how their bread is buttered.

AMEX and High Risk

High-risk merchants, or merchants that face a lot of friendly fraud, typically need more wiggle room in disputes than AMEX affords. If you process fraud, you want the ability to refund the transaction to the cardholder without a chargeback. Furthermore, the merchant should have a say whether a chargeback is unwarranted; AMEX decides what is friendly fraud, and you may not be able to appeal. AMEX chargeback policies make it difficult for merchants to take these actions.

AMEX isn’t completely tone-deaf on these issues however. They’ve recently been working to improve dispute management somewhat for merchants. They’ve reportedly been cracking down on unwarranted disputes, adding more scrutiny to cardholder claims; but it’s hard to know for sure. AMEX keeps their cards close, so to speak, so we have to take their word for it.

AMEX has also launched the “Opt Blue” program, where merchants can process AMEX cards through their existing processors. This cuts the red tape required to accept AMEX, and it also allows Opt Blue disputes to get picked up by Ethoca and Verifi as alerts. This gives merchants come of that wiggle room to refund fraud disputes and avoid chargebacks.


Though dealing with AMEX chargebacks may be different from other payment cards, merchants should be taking the same steps to prevent chargebacks:

  • Communicate frequently with your customers. Email them about their purchases and your return policies.
  • Ensure your statement descriptors are clear and concise.
  • Get PCI compliant in your processing; use 3D Secure authentication with AVS and CVV verification.
  • Capture your transaction data for 12 months.

If you’re thinking of accepting American Express cards, considering the Opt Blue route, or you’re looking for an objective analysis of how AMEX dispute management impacts your bottom line, ChargebackHelp is here for you. Send us an email, call us at 1.800.975.9905 or contact us here.